A)A large number of seller:
● It implies that the number of firms is so large that they are enough so that contribution to the total output of the industry by any firm individually is negligible.
● No single firm is in a position to influence the price in the market on its own by changing its own output.
● So, the price remains constant.
B) Homogeneous products:
● It means that the buyers treat products of all the firms same i.e, homogeneously.
● No firm can charge a higher price, because then the price will stop purchasing it from him, and may shift to another seller.
● The market price remains the same for all the firms.
a) Barriers to entry of new firms:
● The barrier to entry of new firms allows only a limited number of firms into oligopoly industries.
● These barriers can be the patent rights, availability of certain raw materials etc.
b) A few or few big sellers:
● It implies that each big seller contributes a large share of the total output.
● This gives the individual seller the power of influencing the market price by changing its own output.
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